Snapshot
Plexus Corp reported $1.06B of revenue in Q4 2025, up 0.7% year over year, with diluted EPS of $1.87 and an operating margin of 5.0%.
- Revenue
- $1.06B
- YoY growth
- +0.7%
- Diluted EPS
- $1.87
- Operating margin
- 5.0%
What management said
- •With today's earnings call, Todd will provide summary comments before turning the call over to Oliver and Pat for further details.
- •Our robust and well-balanced new program win results across our solutions will support future growth, our team's dedication to innovating responsibly to help create a better world, and our strong financial performance.
- •during fiscal 2026 to deliver revenue growth in excess of our end markets through new program ramps inclusive of market share gains, accelerated revenue growth positioning Plexus
- •Revenue of $1.058 billion approached the high end of our guidance range, marking our third consecutive quarter of sequential growth.
- •Our team's ability to support late quarter demand upside from semicap and energy customers more than offset minor delays in new program transitions in our aerospace and defense market sector.
- •Non-GAAP EPS of $2.14 substantially exceeded our guidance due to favorable discrete tax items, with inline non-GAAP operating margin of 5.8%.
- •We expanded non-GAAP operating margin by 40 basis points and non-GAAP EPS over 30% in fiscal 2025 as compared to fiscal 2024.
- •Finally, we delivered fiscal fourth quarter free cash flow of $97 million, resulting in fiscal 2025 free cash flow of $154 million, an amount that substantially exceeded our projections.
- •We have now generated $495 million of free cash flow over the past two fiscal years while deploying excess cash to reduce our borrowing and accelerate our share repurchase activity.
- •For the fiscal fourth quarter, we secured 28 new manufacturing programs worth $274 million in revenue annually when fully ramped into production.
- •For fiscal 2025, our team generated 141 manufacturing wins representing $941 million in annualized revenue.
- •In addition, efforts to diversify our engineering solutions engagements successfully drove increased wins for fiscal 2025, including a record result in aerospace and defense.
What went well
- •Revenue of $1.058 billion approached the high end of the guidance range, marking the third consecutive quarter of sequential growth.
- •Non-GAAP EPS of $2.14 substantially exceeded guidance, aided by favorable discrete tax items, with in-line non-GAAP operating margin of 5.8%.
- •For fiscal 2025, the company expanded non-GAAP operating margin by 40 basis points and grew non-GAAP EPS over 30% versus fiscal 2024.
- •Fiscal fourth quarter free cash flow was $97 million, contributing to fiscal 2025 free cash flow of $154 million, substantially exceeding projections, with $495 million generated over the past two fiscal years.
- •The company secured 28 new manufacturing programs worth $274 million in annualized revenue, and 141 total manufacturing wins worth $941 million for fiscal 2025, with record engineering solutions and sustaining services wins.
- •Return on invested capital of 14.6% was 570 basis points above weighted average cost of capital, the highest in four years, while debt was reduced by over $100 million and cash cycle of 63 days was the best in five years.
What went wrong
- •Aerospace and Defense revenue decreased 6% sequentially, below the expectation of flat revenue, due to minor delays in the timing of new program ramps (primarily in defense).
- •Aerospace and Defense revenue was essentially flat for fiscal 2025 as commercial aerospace new product launch delays and supply chain inventory adjustments offset double-digit defense and space growth.
- •Industrial revenue was flat for fiscal 2025 as low double-digit semi-cap growth offset reductions in industrial equipment and vehicle electrification.
Guidance changes
| Metric | Period | Previous | Current | Change |
|---|---|---|---|---|
| Revenue | Fiscal Q1 2026 | None | $1.05 billion - $1.09 billion | None |
| Non-GAAP operating margin | Fiscal Q1 2026 | 5.8% (Q4 actual) | 5.6% - 6.0% | None |
| Non-GAAP EPS | Fiscal Q1 2026 | $2.14 (Q4 actual) | $1.66 - $1.81 | None |
| Gross margin | Fiscal Q1 2026 | 9.9% (Q4 actual) | 9.8% - 10.1% | slightly above last quarter at midpoint |
| Selling and administrative expense | Fiscal Q1 2026 | $51.7 million (Q4 actual) | $51.5 million - $52.5 million | fairly consistent |
| Effective tax rate | Fiscal Q1 2026 and fiscal 2026 | None | 16% - 18% | increasing due to global minimum tax |
| Cash cycle days | Fiscal Q1 2026 | 63 days (fiscal year-end) | 66 - 70 days | None |
| Capital spending | Fiscal 2026 | None | $90 million - $110 million | consistent with fiscal 2025 |
| Free cash flow | Fiscal 2026 | $154 million (fiscal 2025 actual) | approximately $100 million | None |
| Revenue growth | Fiscal 2026 | None | accelerating toward 9%-12% goal, growth in excess of end markets | None |
Performance breakdown
| Metric | YoY change | Reason |
|---|---|---|
| Aerospace and Defense revenue | essentially flat for fiscal 2025 | Down 6% sequentially in Q4 from minor new program ramp timing delays; full-year flat as commercial aerospace launch delays and inventory adjustments offset double-digit defense and space growth. |
| Healthcare Life Sciences revenue | up 5% for fiscal 2025 | Up 1% sequentially in Q4; full-year growth from imaging and monitoring subsector strength, new program ramps, and demand increases on previously ramped products. |
| Industrial revenue | flat for fiscal 2025 | Up 11% sequentially in Q4, exceeding guidance; full-year flat as low double-digit semi-cap growth offset industrial equipment and vehicle electrification reductions. |
| Non-GAAP operating margin | +40 basis points vs fiscal 2024 | Productivity gains, fixed cost leverage from higher revenue, and improved operating performance. |
| Non-GAAP EPS | +30% vs fiscal 2024 | Operating margin expansion and favorable tax items. |
Earnings call themes & trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Fiscal 2026 revenue growth | 9%-12% goal | accelerating momentum toward 9%-12% goal, growth in excess of end markets via new program ramps and share gains | accelerating |
| Commercial aerospace (Boeing/Airbus) | awaiting recovery | fiscal 2026 outlook does not contemplate a Boeing/Airbus demand change despite regulatory approval to raise production rates; demand signal could appear within ~90 days | flat, potential upside |
| Semi-cap | low teens growth in fiscal 2025 | expecting similar low-double-digit growth in fiscal 2026 on share gains amid low-single-digit WFE growth | steady |
| Penang, Malaysia facility (Bridgeview) | coming online | near-term margin drag; expected to break even in one quarter and approach corporate profitability in two quarters | ramping quickly |
| Automation and efficiency investments | warehouse automation piloted | AutoStore warehouse automation expanding to more sites, SMT line consolidation, material robots deploying to all sites by spring 2026, shifting CapEx from footprint to automation | expanding |
| Energy / data center power | None | increased focus and a substantial award from a significant player; power generation and thermal management positioned as AI exposure | growing |
Q&A summary
What gives you more confidence in the growth trajectory into fiscal 2026?
Todd Kelsey cited substantial new program ramps progressing well, semi-cap share takeaways, and modest end-market improvement in aggregate, with potential additional upside if commercial aerospace rebounds.
What are your AI-related opportunities?
Todd Kelsey said Plexus focuses on power generation and thermal management rather than the commoditizing compute market, plus semi-cap exposure and healthcare products that leverage AI; the Romania win was a product with embedded AI for cell analysis.
Are you anticipating any fallout from the government shutdown, particularly in defense?
Todd Kelsey and Oliver Mihm said they are not seeing any indications of slowdown or change from customers as a result of the government shutdown.
Has your semi-cap view for fiscal 2026 changed, and how big a driver is data center buildout for energy?
Todd Kelsey said semi-cap fiscal 2025 and 2026 look similar with low-single-digit WFE growth and significant share gains keeping growth in the low double digits; Oliver Mihm cited customer revenue growth in infrastructure, power generation, and electrification.
Should investment be considered an unusual drag on margins, and is it mainly Penang?
Todd Kelsey said it is a near-term drag mostly from the new Penang/Bridgeview site that will be quickly overcome, not a long-term drag; CapEx of $90-$110 million is consistent with prior year and focused on efficiency and capability tools.
Can you get back onto a margin expansion plan after this investment year?
Patrick Jermain said after overcoming the incentive compensation headwind, better fixed cost leverage, automation-driven productivity, and capacity efficiencies could position the company to reevaluate and set a new margin target within about a year.